Although outbound International Automated Clearing House credit transfer items (“IATs”) have a relatively low rate of return for failure of the items to clear, inbound IATs have a much higher rate of return. In some cases, for example, the problem is caused by the fact that IATs bound for the U.S. Automated Clearing House (“ACH”) network are formatted using inoperable routing and account information for posting a credit to a Receiving Depository Financial Institution (“RDFI”) via the U.S. ACH network. In the case of such inoperable routing and account information, an RDFI of an IAT credit transfer will not accept the IAT when it is routed through the U.S. ACH network. In this case, the IAT is returned or rejected by the RDFI. Returned or rejected IATs create a hardship for the intended receiver, the originator, and the intermediaries to the transaction.
The system and method described herein addresses the above-described and other problems by providing a method and system to redirect credit transfers that fail to post or settle when introduced into the U.S. ACH network. Accordingly, the entity that introduces the transfers into the U.S. payment system can ensure successful posting and settlement for an increased proportion of IATs received from foreign senders.